Resignation of Statutory Auditors of Material Subsidiary
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M/s Kumbhat & Co. LLP, Chartered Accountants, have resigned as Statutory Auditors of Vashishtha Embroideries Private Limited, a material subsidiary of the company, effective November 5, 2025. The auditor was originally appointed on February 17, 2023, for a 5-year term covering FY 2023-24 to FY 2027-28, meaning this is a mid-term exit. According to the resignation letter, the company asked the auditor to reduce its statutory audit fees for the financial year ending March 31, 2026. The auditor stated it could not continue at the reduced fee given the time and effort the audit would require, citing applicable Standards on Auditing and Quality Control. The auditor confirmed there are no other concerns or material reasons behind the resignation beyond the fee disagreement.
A mid-term auditor resignation at a material subsidiary, even if driven by a fee dispute, may raise minor governance red flags and could delay the subsidiary's audit process. Shareholders should watch for timely appointment of a new statutory auditor and any comments in the upcoming audit filings; in the short term, this is likely a procedural matter rather than a major stock-moving event.